Rich people screwin up our economy

[RS69]

I'll say it again, Bullshit......both my wife each have done it and she started her business with a mere $5k that we made and put into the opening of her practice back in 1999. I'd love to add up all our income and investments and see what the total is....but in the end, regardless of what that number is, we have what we have because we did it on our own. I'll send you her law skill loan payments if you don't believe me.

 

It's all about Skills and knowing how to use them.

 

 

I agree, it takes money to make money. My friends and family that own their own business, bust their asses to get there. It take a lot of time, money and knowledge to make a successful business. Anyone(production worker, college grad, high school drop out, like my business idol Richard Branson) can start a business, however, to make the business successful takes hard work. Most of today's wealthy class(at least my my area, New Albany, Galena) are self employed. Most CEOs dont have any real control of the business, the board of directors own them. It is true that Richard W makes some coin, but he has a huge responsibility to turn GM around. I dont agree on the huge severance packages that the CEOs or other high directors get if they fail. That is another topic in itself.

 

If a person is willing to take a risk with their resources and create a successful business, I see no problem with them earning more than the average person. I can tell you now, it is costing my wife and I a lot more than $5K to start her law firm.

[Science Abuse]

You are an idiot. If you were rich you wouldn't have a problem with it so why should they?

 

I hope one day I can help fuck up the economy with my insanely rich ass.

If i was making a Mil, you bet your ass I'd spend it, I'd start with a house, paid in full. The rest would be cost of living, more education, and cars.

 

You do bring up another point: Who is in DC making the descisions about how much favor the wealthy people receive....? Wealthy people.

[TTQ B4U]

Educated people who have aquired wealth. Good and bad ones. Let's pick the crowd favorite here.....Ron Paul......he's very well educated, a doctor and a hard worker and very likely rich. Personally, I'm rather glad to have someone of his credentials involved.

 

Who is in DC making the descisions about how much favor the wealthy people receive....?

[TTQ B4U]

Best of luck and enjoy the journey that's for sure. If she has any questions, just PM me. I'd be happy to put her in touch with my wife.

 

BTW...if you think it's expensive to get it up and running....wait until she gets going....advertising and networking isn't cheap but once she gets it right and working, all that pays for itself many times over. I think Tamie netted $15k her first year. Not much but it's 100% her business. That's priceless and I'm certainly envious of her as her boss is the best

 

I can tell you now, it is costing my wife and I a lot more than $5K to start her law firm.

[KlubFoot]

If i was making a Mil, you bet your ass I'd spend it, I'd start with a house, paid in full. The rest would be cost of living, more education, and cars.

 

And this is the reason you will never truely be wealthy. The same reason that most people who win the lottery or are passed on a considerable amount of money go broke eventually.

 

Why pay for a house in full? Even if you were a numnuts no talent ass clown and couldn't figure out how to invest it any better, you could set that money aside in a savings account and earn interest. I don't know about you, but I'd rather pay my mortage payments with the interest earned off of that million every month then blow all that money at once and fuck myself with high property taxes and maintenance that I couldn't afford.

 

Arm your minds with financial intelligence. You're obviously a smart person. You just have a skewed opinion of how money really works.

[copperhead]

This is true...but where are they? Nevermind that the saved money isn't befitting the economy nearly as much as it would if spent, just ask yourself: If I had to put 8.2 million dollars somewhere, would I put it in the Delaware County bank?"

Chances are, it would end up in Switzerland or the Cayman Islands.

 

People hide money in Swiss and Cayman accounts when they are trying to hide it.

 

Investing does help others. Dumping money into a bank account means the bank in turn has the money to lend to people like you and me to buy stuff like cars and houses. Without that money infused into the system by the rich people you hate so much, I wouldn't have a house right now because nobody would lend it to me.

 

Investing in stocks means that companies have the money to grow. If companies didn't offer shares, they would have to rely solely on single investors, bank loans or investment firms. Guess what, these are the "rich people" you don't like. Without this money, companies can't afford to start, and can't afford to grow, which means NO JOBS. No jobs means your 160 people won't be making squat, because they will be sitting on their ass.

 

Now then, stop inventing statistics. If you want to make an argument at least make it a valid one. The reason you think no one is grasping your viewpoint is because your argument is flawed.

[copperhead]

Ahh not the same context, though.

-First off, you're talking about generating power, not using it up. If you were to present the same thing as "I spent lots of time and money on something that consumes allot of fuel", then it would be along the same lines. You'd be accounting for a large amount of a resource for recreation, while lower power cars could use to do work. Thus, we Americans are paying more for fuel. The worlds markets are making it harder for us to acquire the resource.

-There isn't a finite amount of horsepower. When you make more horsepower, it's not coming from anyone else's engine. When you lose horsepower, it doesn't go to some one else's engine.

 

This is all hypothetical, though. We all know that FCs don't make shit for power.

 

So long as we have the federal reserve, basing our currency on hopes and dreams, there isn't a finite amount of money either.

[copperhead]

And this is the reason you will never truely be wealthy. The same reason that most people who win the lottery or are passed on a considerable amount of money go broke eventually.

 

Why pay for a house in full? Even if you were a numnuts no talent ass clown and couldn't figure out how to invest it any better, you could set that money aside in a savings account and earn interest. I don't know about you, but I'd rather pay my mortage payments with the interest earned off of that million every month then blow all that money at once and fuck myself with high property taxes and maintenance that I couldn't afford.

 

Arm your minds with financial intelligence. You're obviously a smart person. You just have a skewed opinion of how money really works.

 

And to build off that comment - Paying on a mortgage costs less in the long run. The longer you are paying on it, the more inflation goes up, which means that once you adjust for it you are actually spending less and less to buy the house, while the value is going up. While it would be nice to have my house paid off in 15 years, I'm happy on a 30 year plan. I'll have sold the house long before then, for a nice profit, without first having to pay it off in full. A house can be the easiest investment you make, so long as you buy smart. I plan on making $50k over top of what I paid for this place in roughly 10 years. I'll also walk out with a good bit of what I've paid into it monthly, after having paid off the loan. Sounds like a good deal, when the payments for this place aren't much higher than a zero return apartment rental. Oh, and my tax returns are going to kick ass until I get the interest paid down. WIN WIN WIN.

[Science Abuse]

And this is the reason you will never truely be wealthy.

If by that you mean, I wont have allot of money,t hen you may be correct. I wIll, however, have allot of assets.

As for going broke, that is not correct either. If I blow $500,000 on a house,t hen I have a $500,000 house, 100% positive equity. So, supposed I don't have a job and I blow the whole million, I'm still not broke. I have a house that I can hock for $400,000+, or I have a shit ton of equity that I can borrow against.

The pitfall of lotto winners is spending like they have no limit to the cash. This results in bleeding cash on things from with you cannot get it back: Travel, booze, coke, whores, cars that depriciate 50% as soon as you leave the lot, etc. Many of them actually lose loads of money gambling. lol

[Hilbillyhomeboy]

Why is it the responsibility of the winner to help the losers? Kind of like saying it is my responsibility to supply you grandmother with the medications she cant afford.

 

There will always be poor people, no way around it. You cannot legislate that mentality out of people. Of course I would argue in America we don't really have poor people. In America the poor have color televisions and prepaid cell phones along with a car. The majority have poor monetary decision making abilties, we cant change that.

 

I think what "The benz" wants is a redistribution of wealth. We have enough of that in America as it is we don't need more. BTW... If you think trickle down eco was bad, try redistribution of wealth. IMHO Trickle down was the reason for the 90's boom, not Slick Willy.

 

Mr. Marx would be proud.

[HAOLE]

Mr. Marx would be proud.

Yep!

 

It fails EVERY time!

[KlubFoot]

If by that you mean, I wont have allot of money,t hen you may be correct. I wIll, however, have allot of assets.

As for going broke, that is not correct either. If I blow $500,000 on a house,t hen I have a $500,000 house, 100% positive equity. So, supposed I don't have a job and I blow the whole million, I'm still not broke. I have a house that I can hock for $400,000+, or I have a shit ton of equity that I can borrow against.

 

If by assets you mean the house you live in, the cars you drive and the things you buy... you are absolutely ridiculous for believing that those are anything but liabilities. Think about it. You pay your mortage, property taxes, maintenance fees, etc. every month on a home. It is TAKING your money from you. Now, when you feel like you're about to be down and out, sure you can sell that home and make a good bit of cash off of it, but you never gained anything more then what you had in the beginning.

 

With my example of putting that million into a savings account and paying your mortage with the interest, you at least get to live in your mansion for free. You do not gain any money, but you have gotten something free out of the deal and that's obviously better then nothing.

 

Now, invest that million properly and with the right motivation and knowledge you too could be the next Donald Trump.

[Dammit Charlie]

x2.

 

Its not the rich hurting, it is the now 5th generation of welfare recipients. We continue to provide people who really dont need it, people have more kids so they can collect it, we do not drug test people on welfare, people are teaching their kids that are in the welfare system that it is OK and normal to live off welfare.

 

+1000. I can't tell you how many people I know that are abusing the system like this..it's sick. When I use to work retail you could actually tell when welfare checks were recieved...it's sick how people think it's ok to spend welfare money on a cell phone when they're kids are eating bread and spam for dinner.

[Scotty2Hotty]

http://www.ettnet.se/~svante/temp/lenin_ownage.jpg

[31rx7]

I don't have the time or patience to read through all pages of this and respond. But, at the same time, I can't leave well enough alone.

 

I am assuming your point is that people with lower discretionary income (ie, poor people) have a more active contribution to the economy at large (because they spend most all of what they make) than a rich person does (because they save or invest a large portion of what they make).

 

From a short term perspective, you may have a point. From a long term perspective, I am not so sure.

 

The savings and investments made by a person with higher discretionary income are used to generate capital (either through stocks or loans from banks) that is invested in research, development, new products and services, etc. that create the jobs of tomorrow. Without investment into the jobs of tomorrow, the only jobs left will relate to buying and selling goods and services manufactured / produced in low cost labor markets (China, Indonesia, etc.).

 

You and I will be relegated to selling insurance and electronics to each other.

 

I will accept the argument that there are significant inefficiencies in all of this. The welfare system is a great example. But, your proposition only holds water IF the rest of the environment does not change. Which of course it always does. Which means we need investment to create new products and services and provide existing products and services at lower cost.

 

Where does this investment come from? From people with discretionary income used for savings and investments, aka, "rich people".

 

I am not saying "rich people are better than poor people because..." or anything like that. What I am saying is that we are all involved in an extremely complex economic system with interwoven causes and effects, and as a result there are roles we all unwittingly play in this system.

 

Do I save or invest money so I can create the jobs of tomorrow? NO! I do it because I want to be sure I can support my wife and myself when I get older and so I can send my kids to school so they can have a good life and (ideally) do something positive for this country as well as their immediate community.

 

Do people work crap jobs at low wages because they want to "add more to the economy"? Hell no! They do it because they have to in order to survive, and I respect all of them because they HAVEN'T GIVEN UP on the goal of having a better life for themselves or their families. If they have given up, they would be doing welfare. (As an aside, education addresses a lot of this as it helps create a vision for something better, but that is a discussion for another day).

 

I would argue that for those of us that are not born to money, the reason we work hard is primarily because we want something better for ourselves and our families, and has nothing to do with the economy. Any benefits to the economy that result from what we do are secondary and coincidental.

 

To loop back to your premise ("trickle down doesn't work"), I would argue it does work, but it typically takes YEARS for it to work. Today, we are reaping the benefits in the job market from investment done maybe 3 to 5 years ago.

 

And, of course we all want it right now which is why people don't think it works, thus creating the perception of those nasty rich people screwing up our economy.

 

Rich people are bad for the economy, and trickle down doesn’t work. You've all heard me say this before, but here's some fodder:

This is an example that trucked through my head a few minutes ago, so I thought I’d write it down. To illustrate, I’ll use the example of Richard Wagoner and some laid off GM line workers.

 

Lets establish annual pay, first:

Wagoner; $8,200,000 (2005)

Line worker: $50,000 (there abouts. Fair wage for a bolt installer, shut up UAW)

 

For the comparison, we’ll hypothetically knock Wagoner down to $200,000 a year (Poor guy must be starving) With that free’d up $8mil, we can employ 160 line workers (insurance etc not included).

 

Now, ignoring the fact that poorer people tend to have more kids, we’ll just focus on individuals here, in a periodic consumption kinda way, starting with daily. The worth to the economy is measured by how much they spend and put back in. I’ve giving Wagoner a big benefit of the doubt, making him out to be a much better consumer than he probably is.

To summarize, we’re comparing an $8.2mil Wagoner vs 160 $50k workers.

 

Daily:

-Meals

*Wagner, 3 meals x $50 (he don’t eat white castle). $150 into the local economy.

*160 workers, 3 meals x $10 (we eat crap, but can afford Arbys because we have jobs) $4800 into the local economy.

Workers > Rich

 

Weekly:

-Fuel

*Wagners jet is thirsty, he burns 300 gallons a week @$3; $900 into the economy.

*160 workers. In 2005 the average yearly consumption per capita was about 540 gallons, divided by 52 is 10.4 gallons a week, times 3, times 160. $4992. (You and I know that commuters use much more, and the non-drivers swayed that survey. But I needed data)

Workers > Rich

 

Monthly:

-Housing

*Wagner, lets round way up and say he spends $10,000/mo on his domestic properties.

*Workers: You’re not affording more that $1000/mo, so $160,000 a month.

Also keep in mind, houses are consumers too, 160 homes will require more plumbers, electricians, masons, etc.

 

-Water:

*Wagner: round up to $1000/mo, lets say he had fountains and pools.

*Workers: About $50? x160 is $8000

 

-Energy (Consuming allot of this is bad, but for Republicans sake, we’re only focusing on money)

*Wagner, lots of gas and electric for his big place, $2000/mo

*Workers: Who pays less than $200avg/mo for a small house? No one. $200x160 is $32,000

 

-Media

*Wagner gets the illest shit, pays $1500 a month on cable, satellite, phone, internet, and movie rentals.

*160 workers just want cable and internet, average it at $80/mo (wish mine was that cheap), $12,800

 

Stuff:

-Audio

*Wagner gets the top of the line, best you can buy. $0 into the national economy. He damn sure didn’t buy an American stereo/TV. But, lets say that the store/salesman made $2000 off the sale.

*Workers, same deal. Our crap is cheaper, but we buy allot more of it. The stores just have to make $13/head off of us to beat out Wagner. Believe me, they make more. Walmart – Sanyo profit margins are much higher than B and O.

 

-Cars

*Wagner has an impressive stable….it’s probably all German and Italian. But, giving him the benefit of the doubt, he buys a top’o’the line GM vehicle from every class: $90k XLR, $60k Escalade, and a $200,000k RV. So, $350,000

*Workers: We have our jobs, we can afford a new base G6 for our family: $18k each, $2,880,000.

 

 

Vacations

I give up here, this wont be counted. This will again be a huge skew because Wagners will spend $3000 on airfare to go someplace outside the US, but 160 trips to “the lake” will probably average $500-$1000 each.

 

I’ve spent enough time, but this is enough to get the point. Rich people are bad for the economy because they are poor consumers. “Oh but they invest”...Working capital is not earned income, so it’s not here. Furthermore, they invest some beyond our borders (if they’re smart), so not all of it trickles down. In point of fact, very little is trickling down. Any econ folk want to tell us what our dollar would be worth in the following comparison:

Lots of people making a little money

A few people making allot of money

 

So, that’s my hair brained idea, and may well be flawed. I leave it to you all to go at it. Something that you cannot argue against:

$160 people making $50,000 a year will put ALLOT more money back into the local/national economy than one guy making $2,000,000

 

In the very limited example above, Workers spend almost twice on annual food consumption than Wagoner spends on everything, all year (1,752,000 vs 627,558).

All told, the 160 workers made $8,000,000 and put $7,397,184 of it BACK into the local economy. The $602,816 remaining, divided over 160, means that the workers have $3767 each to spend on clothes, soap, vacations, etc. It all comes back. (Not even mentioning credit debt)

Wagoner, on the other hand, made $8,200,000 and only spent $627 558. That is $7,372,442 that does not go back into the economy.

“Oh, but he invests it!” Not all of it, but lets go with you guys, lets say he invests it…for how long? It will eventually be cashed out, his $8.2mil is his money. Chances are, he has good enough brokers that he will pull out quite a bit more than he put in. In the end, the economy still loses.

 

I’ve said it before, I’ll say it again: Reagan was a charlatain, and “trickle down” only trickles up.

[SpaceGhost]

Wait in the other thread wasn't it the US Treasury's fault for our bad economy, they print the money out of thin air or something. I can't keep up.

[HAOLE]

Wait in the other thread wasn't it the Federal Reserve's fault for our bad economy, they print the money out of thin air or something. I can't keep up.

I would say that that is the major contributor to a devalued dollar. Therefore this will lower you buying power and make you work harder and longer to have the same lifestyle.

 

Read The Creature From Jekyll Island by Griffin. This will fill you in.

 

Or check out the videos in this thread:

http://www.columbusracing.com/forums/showthread.php?t=42829

[Kevin R.]

If by assets you mean the house you live in, the cars you drive and the things you buy... you are absolutely ridiculous for believing that those are anything but liabilities. Think about it. You pay your mortage, property taxes, maintenance fees, etc. every month on a home. It is TAKING your money from you. Now, when you feel like you're about to be down and out, sure you can sell that home and make a good bit of cash off of it, but you never gained anything more then what you had in the beginning.

 

With my example of putting that million into a savings account and paying your mortage with the interest, you at least get to live in your mansion for free. You do not gain any money, but you have gotten something free out of the deal and that's obviously better then nothing.

 

Now, invest that million properly and with the right motivation and knowledge you too could be the next Donald Trump.

 

I agree 100%. These are liablities essentially you speak of, not assets. If the real estate market falls into the shitter you are not going to get your 500,000 back.

 

But like he said, you won't get back ( most of the time ) more than what you put in, present value equation yo.

[TTQ B4U]

Technically in the world of finanace a paid off home is listed as an asset and is a good debt. If it's not paid off, then it would be listed as a liability, but typically there is an understanding that some equity is present. Although not in as many cases today since people tend to borrow against any equity way to easily.

 

Good debt is debt that you have incurred by purchasing something that appreciates in value and/or can provide you with passive income that pays for itself.

 

What is even better is when good debt appreciates in value and the best kind of good debt is good debt that puts money back in your pocket. Most seen in rental income. In short good debt normally comes about when you have purchased a true asset, which is a product or service that meets the description above.

 

In the real world, a home is a Good Debit. I have several rental properties which are not paid in full of course and they are not only considered assets, but they are good debit by definition. They bring me profit each month above my total expenses including taxes and misc. stuff...... and that's the idea.

 

The only way you will truly be able to realize the value of your own home is to either move to a smaller or less expensive property, remortgage and use the equity to invest in assets that will appreciate greater than your property.

 

Home and car interest rates are very low right now compared to investments and even today, I'm buying a new van that I could stroke a check for, but that wouldn't make sense to take money out of an investment and pay off a loan that's only costing me 5.25%. Same goes for my house and rental properties. My investments are tracking way higher and it's best to put money in them before paying off my house. Should things change in terms of rates on my investments, so will the direction of my money...however, I would hope investment rates wouldn't drop below the rate on my mortgage!

 

I agree 100%. These are liablities essentially you speak of, not assets. If the real estate market falls into the shitter you are not going to get your 500,000 back.

 

But like he said, you won't get back ( most of the time ) more than what you put in, present value equation yo.

[500HP RX-7]

I love watching poor people argue, it's cute.

[Boost-n-Juice]

I love watching poor people argue, it's cute.

 

So basically what you were trying to say is that you're rich and gay. How "Cute".

[Conesmasher]

All told, the 160 workers made $8,000,000 and put $7,397,184 of it BACK into the local economy. The $602,816 remaining, divided over 160, means that the workers have $3767 each to spend on clothes, soap, vacations, etc. It all comes back. (Not even mentioning credit debt)

Wagoner, on the other hand, made $8,200,000 and only spent $627 558. That is $7,372,442 that does not go back into the economy.

“Oh, but he invests it!” Not all of it, but lets go with you guys, lets say he invests it…for how long? It will eventually be cashed out, his $8.2mil is his money. Chances are, he has good enough brokers that he will pull out quite a bit more than he put in. In the end, the economy still loses.

 

I’ve said it before, I’ll say it again: Reagan was a charlatain, and “trickle down” only trickles up.

 

I know that this is slightly old, but your view where this Waggoners cash is.....is completely misrepresented.

 

Your statements make people seem to beiieve that he is hoarding cash in a safe in his basement. Sure he'll have some cash, but he's not going to cash in 8.2 million. And just because it's not spent on the goods and services level. Unless you have money stacked in a safe, chances are it is working for someone......which means that it is IN the economy.

 

The only other feasible "cash-in" would be into bars of gold/silver/platinum....but that's highly unlikely.

 

When you put your money into a savings account, it gets used.....typically by the local economy for small business loans and home mortgages.

 

So to say that this money has gone awry and is not invested into the local economy is a complete misrepresentation of what is happening.